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The point isn’t that people with assets should care. The point is that people who hold dollars should care because eventually they’ll need to convert those doll

The point isn’t that people with assets should care. The point is that people who hold dollars should care because eventually they’ll need to convert those dollars into assets.

deleted 6y ago
[deleted]
bredren 6y ago
It is this, but there's a twist. Presume a person with assets sees information like this and in combination with other factors causes them to agree a dramatic market pullback (on the scale of last year's but worse) is likely and soon. The next logical step would be to enjoy all of the gains so far and sell out from the risk of the drop, and even after a nominal loss of value rebuy. What I've seen is rather than deal with what that might require, people will present the above argument. They may refer you to 1973's "A Random Walk down Wall Street," or bring up capital gains taxes. But what they will not do is confront the cognitive dissonance they're feeling between their own sense that something is wrong with the market and that they are in a position to take great advantage of a drop but will not.
- CyberRabbi 6y ago
  Hmm I don’t see a market pullback happening any time soon. Honest question, Why would this information lead one to believe that? This information leads me to believe that the market is reasonable priced, given that it suggests the recent price increase is not a bubble but rather due to dollar devaluation in the asset marketplace. All other things equal, unless they start burning money I expect prices to grow or remain stable.
- lotsofpulp 6y ago
  > The next logical step would be to enjoy all of the gains so far and sell out from the risk of the drop, and even after a nominal loss of value rebuy. My next logical step would be to assume the government will do whatever is necessary to pump those equity values back up, just like they did last year in Mar/Apr. So unless you think you can time it so that you sell when asset prices drop, and buy before the government pumps them back up, the logical step would be to stay the course, and keep your wealth in inflation resistant broad market indices.

The point isn’t that people with assets should care. The point is that people who hold dollars should care because eventually they’ll need to convert those dollars into assets.

deleted 6y ago

[deleted]

bredren 6y ago

It is this, but there's a twist. Presume a person with assets sees information like this and in combination with other factors causes them to agree a dramatic market pullback (on the scale of last year's but worse) is likely and soon. The next logical step would be to enjoy all of the gains so far and sell out from the risk of the drop, and even after a nominal loss of value rebuy. What I've seen is rather than deal with what that might require, people will present the above argument. They may refer you to 1973's "A Random Walk down Wall Street," or bring up capital gains taxes. But what they will not do is confront the cognitive dissonance they're feeling between their own sense that something is wrong with the market and that they are in a position to take great advantage of a drop but will not.

CyberRabbi 6y ago
Hmm I don’t see a market pullback happening any time soon. Honest question, Why would this information lead one to believe that? This information leads me to believe that the market is reasonable priced, given that it suggests the recent price increase is not a bubble but rather due to dollar devaluation in the asset marketplace. All other things equal, unless they start burning money I expect prices to grow or remain stable.
lotsofpulp 6y ago
> The next logical step would be to enjoy all of the gains so far and sell out from the risk of the drop, and even after a nominal loss of value rebuy. My next logical step would be to assume the government will do whatever is necessary to pump those equity values back up, just like they did last year in Mar/Apr. So unless you think you can time it so that you sell when asset prices drop, and buy before the government pumps them back up, the logical step would be to stay the course, and keep your wealth in inflation resistant broad market indices.